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Dear Friend
Answer your credit questions. Page 2

Health

Garden Trivia. Page 3

Trivia

Picture This!. Page 3

2013

Elite Credit News is a monthly newsletter from your friends at Elite Credit Care Dear Friend, We hope you enjoy this months newsletter. It is a great time to spend outdoors with your family! Respectfully, Attila Thiry

Credit News
The Newsletter Thats Both Informative and Fun!

Volume 1, Issue 20

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Is There A New Score In Town?

Contact Us Now To Get A Free Consultation! (Valued at $200) | (877) 604-4489 Answers to the trivia:
7: Ansco Automatic. 3: A kite. 9: Fort Peck Dam. 4: A camera obscura. 10: Yosemite. 1: False. It is an American company. 6: Iwo Jima. 8: International Standards Organization. 5: His cigar. 2: Rear Window. By Attila Thiry

Is There A New Score In Town?

continued from page 1 been the industry standard scale for over 20 years. In fact, 300 to 850 has been the only credit score range with which most of us are familiar, because it is the only score range we have come to know. The new score range doesnt really do anything to make the VantageScore model any better or worse than a FICO score. What it does accomplish is to remove the common consumer confusion over the score range, which use to be 501 to 990. A FICO score of 750 and a VantageScore of 750 did not mean the same thing under the old scale. Under the new scale similar scores still wont mean the same thing but at least theyll be directionally similar as to the risk expectation. The new VantageScore score also incorporates are more liberal minimum scoring criteria, which allows it to score more consumer files than the previous version. According to VantageScore Solutions the newer model will score between

27 million and 30 million more consumer files, which is roughly the population of Texas. This is good news because it is, in fact, better to have a credit score than it is to not have a credit score. Again, the ability to score more files doesnt make VantageScores model better than a FICO score. But, lenders are looking for ways to make automated decisions on consumer applicants who have limited credit report information. Perhaps the most significant consumer friendly change to this newer credit score is its treatment of 3rd party collection accounts. If you pay or settle a 3rd party collection and the collection is then updated to show a $0 balance due, the new VantageScore credit score will completely ignore it. That means the collection will have no impact, at all, on your score. In FICOs FICO 8 suite of risk scores they will ignore a collection that has an original amount less than $100, even if it is still unpaid. And, while the new VantageScore score ignores paid and settled collections it still doesnt guarantee that the lender will not consider it on their own when they pull a consumers credit report. There have been several attempts, legislatively,

to force the credit reporting agencies to remove paid or settled collections from credit reports. None of those efforts have been successful. This change to the VantageScore score seems to accomplish the same thing. Despite all of these changes, credit scoring is still a performance industry. If your score is better than its competitors then it has a chance to flourish. If it does not perform better then it has no chance, regardless of how much consumers may or may not its features. Each time a new model is developed it is inevitable that performance comparisons will be made to prior version. Normally the newer generation scores will outperform the older generations, but only marginally. VantageScore 3.0 was measured as improving by 25% over the prior version. While the 25% figure is certainly impressive, it can also set off alarms with lenders that were using the prior score version. If the newer version is 25% better at identifying risk borrowers that means the current version is 25% worse at the same thing.

In 2006 the credit reporting agencies formed a company called VantageScore Solutions LLC. VantageScore was born out of a meeting between the credit reporting agencies and advice they were given by a 3rd party consulting firm that suggested they could take 100% of FICOs credit score market share. The VantageScore credit score was born. Since 2006 VantageScore had redeveloped their score once, VantageScore 2.0. But, in February the company announced that it had released the third generation of their scoring model, VantageScore 3.0. This third generation is considerably different than their

15,000 lenders in the United States, give or take. Still, 10% market share for a company It is very difficult to get a straight that has been around less than 9 years in an answer from the credit reporting agencies industry where one company has dominated regarding VantageScores market share. And, the market for over 20 years is pretty impressive. VantageScore says they do not know who uses The 1,300 figure does not mean that those their scores and, thus, cannot quality market lenders are only using the VantageScore credit share either. There is not doubt, however, that score with which to make lending decisions. FICO continues to enjoy its position as the Many lenders utilize a score based grid where dominant credit scoring model. they will take more than one score for their risk According to Experian, one of the national assessment practices. Point being, those same credit reporting agencies and a distributor 1,300 lenders could also be using a FICO score. of the VantageScore credit score, over 1,300 New and Improved of their clients across a variety of industries The VantageScore 3.0 model is now scaled are utilizing VantageScore. That is in the with a score range of 300 to 850, which neighborhood of 10% of the lender market probably looks familiar to all of you. 300 to when you consider that there are around 850 is FICOs published score range and has
Market Share
Continued on back page

first two generations.

Also in this issue

This Month in History pg 2 Internet Tidbit: LettersofNote.com pg 2 By The Numbers: Mothers Day pg 3 Quotes to Live By pg 3 Quotes to Laugh By pg 3

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This Month in History:

May 2, 1919 Americas first passenger airplane service began. May 13, 1992 For the first time in space history, three astronauts from the space shuttle Endeavour walked together in space. May 20, 1932 Amelia Earhart became the first woman to make a solo transatlantic flight. May 27, 1937 The Golden Gate Bridge in San Francisco was opened to the public. May 29, 1917 John F. Kennedy was born in Brookline, Massachusetts.

Dear Friend
Dear Friend, When the 7-Year Rule Doesnt Apply Even if youre a newbie to the world of credit reporting youre likely familiar with the 7-year rule for the reporting of negative information. Late payments, collections, judgments, repossessions, charge offs, foreclosures, settlementsthey all can remain on credit reports for 7 years but not a minute longer. There is no exception to that ruleor is there?
Bankruptcy

from the Secretary or an institution regarding the status of a borrowers account on a loan made under this part until the loan is paid in full. Why FICO Scores Vary From Bureau to Bureau Can you explain to me why FICO scores would be different at Equifax, Experian and TransUnion? This was a question I was asked during my employment interview with Fair Isaac and Company (yes, thats what they use to be called) in Atlanta in 1997. Thankfully I answered correctly or youd be reading about credit from someone else. There are really only two reasons your FICO scores would be different across the bureaus. The first, inconsistent data. As redundant as you might believe your credit reports to be, theyre not identical. Something is different whether its the account inventory, a derogatory item, balances on accounts, or inquiries. Even the slightest difference in credit data can result in a different score. Something as innocent as a different date can lead to a different variable, which means a different weight, which means a different score. Still, most credit reports are identical, right? Yes, its true that in 2013 most creditors choose to report to all three credit bureaus. But, that doesnt mean all of them will do so. Even on my credit reports my credit union credit card is reported one of out three bureaus. And, in my work where I see countless credit reports Ive seen collections and judgments showing up on one or two of the three reports. There are plenty of other examples of mismatched data. Now, on to the other reason why scores arent the same across credit bureaus. The models are not the same. Thats right, the FICO score built for Equifax is not the same as the FICO score built for Experian which isnt the same FICO score built for TransUnion. Dont get me wrong, theyre similarjust not exact. So, even if you did have truly identical credit reports (which you dont) your scores would be different across the bureaus because of model variations. All in all, you should expect your scores to be within 10-15 points of each other unless theres something major missing from one or two of your reports.

Trivia Quiz: Picture This!

May is National Photo Month. To celebrate, take this trivia quiz to test your photographic memory.
1. True or False: Kodak is a Japanese company. 2. Which Alfred Hitchcock film featured a photographer who used his camera to look into the lives of his neighbors? 3. In 1905, the U.S. Army took the first aerial photographs. What kind of aircraft was used? 4. The forerunner to the camera was a darkened box that admitted light through a convex lens. What was this instrument called? 5. Before taking his famous photograph of Winston Churchill, photographer Yousef Karsh pulled what out of Churchills mouth? 6. In 1945, an iconic photograph was taken by Joe Rosenthal depicting five U.S. Marines and a U.S. Navy corpsman raising the American flag where? 7. Instead of using an expensive, specialized camera, John Glenn used this common off-the-shelf camera on his space flight. What was this type of camera? 8. What does ISO stand for? 9. What image was on the very first issue of Life Magazine in 1936? 10. What national park in California was Ansel Adams famous for photographing? Answers on back page

Internet Tidbit
One of the more intriguing ways to understand history is to read accounts of it written as it was happening. LettersofNote.com is a blog-based archive of correspondence from people throughout history. In many cases, the website features actual scans along with transcripts of letters written by famous and non-famous people alike. Letters of Note provides a fascinating insight into the history and controversy of the day, but also a look at ordinary life from times past.

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There are two consumer bankruptcies that are commonly included in consumer credit reports; the chapter 7 and the chapter 13 varieties. Bankruptcies are not reported to the credit bureaus, like an auto loan or a mortgage, but are instead proactively collected by the credit bureaus using PACER (Public Access to Court Electronic Records). Chapter 7 bankruptcies can remain on a credit file for no longer than 10 years from the date filed. What that means is the debts that were included in the bankruptcy will be long gone at least 3 years in advance of the bankruptcy being removed. Chapter 13 bankruptcies can remain on a credit file for 7 years from the date discharged but not longer than 10 years total. Most chapter 13 bankruptcies take 3 to 5 years to fully discharge so chapter 13s are a 10 year sentence, just like a chapter 7.
Liens

By The Numbers:
Mothers Day

Health & Wellness

Garden Trivia

By: Attila Thiry

Tax liens can remain on a credit report indefinitely if unpaid. And, even after a tax lien has been paid and released the credit bureaus can maintain them for 7 additional years from the release date. However, if youve paid a Federal tax lien in full you can petition to have it withdrawn rather than released. If you are successful the lien will be removed from your credit reporting immediately because the credit bureaus do not maintain withdrawn liens as a matter of policy.
Defaulted Student Loans

- Americans spend over $670 million on Mothers Day cards each year. - Flowers account for almost 70 percent of all Mothers Day gifts. - There are over two billion mothers in the world. - The average person will spend $152 on gifts. Total spending exceeds $18.5 billion annually. - One-quarter of Mothers Day shoppers buy their gifts online. Source: IPSOS-Insight, National Retail Federation

The Fair Credit Reporting Act governs the reporting of negative information as it pertains to the length of time negative data can be maintained. Thats true for everything except government issued or guaranteed student loans. The Higher Education Act governs the reporting time frames for those types of student loans. Hold in to your hatsdefaulted student loans can remain on your credit reports forever. The language in the Higher Education Act is pretty clear on that, a consumer reporting agency may make a report containing information received

The onion is actually classified as a lily botanically. Asparagus is also a member of the lily family. About 37 percent of U.S. households have food gardens in the summer. Ever heard the phrase cool as a cucumber? Well, it is true! The inside of a cucumber on the vine can be up to 20 degrees cooler than the outside on a warm day. Hydrangeas produce different colored flowers based

on the pH level of the soil. A single plant can produce flowers ranging from pink to purple to blue by changing the chemical make-up of the soil around the plant. Most members of the nightshade family are poisonous, but this group also includes some edible plants, such as the tomato, potato, and eggplant. The daisy was originally called the days eye because the yellow center resembled

the sun. Eventually, the name changed to daisy. Leaf lettuce has been around since the time of the ancient Greeks, but heading lettuce did not appear until the late 1500s. The most popular home grown vegetables, in order of popularity, are tomatoes, peppers, cucumbers, onions, beans, lettuce, and carrots. Tomatoes are grown in over 85 percent of all vegetable gardens.

Quotes to Live By:

- Life is full of beauty. Notice it. Notice the bumble bee, the small child, and the smiling faces. Smell the rain and feel the wind. Live your life to the fullest potential, and fight for your dreams.

Quotes to Laugh By:

- Arguing about whether the glass is half full or half empty misses the point, which is this: the bartender cheated you.

Ashley Smith Elite Credit News

Richard Gere | May 2013 3

2 May 2013 | Elite Credit News